Your Directors are pleased to present the Third Annual Report of the Company together with the Audited financial statements for the financial year ended March 31, 2015.

REVIEW OF PERFORMANCE

During the year under review, your Company recorded an increase of 14.22% in revenue from operations at Rs. 3,134.09 Crore as compared to Rs. 2,743.98 Crore in the previous financial year. Your Company reported net profit before tax of Rs. 23.48 Crore for the year under review as compared to Rs. 34.24 Crore for the previous financial year.

Your Company's fashion brands are distributed through its retail chains, exclusive brand outlets (EBOs) and multi brand outlets (MBOs) across the country. The stores in Company's retail chains viz. Central, Brand Factory, I am in, aLL, Planet Sports and Lee Cooper are spread in 76 cities across the country and cover over 4.90 million square feet of retail space. These retail chains collectively attracted over 44.3 million customer footfalls during the financial year ended March 31, 2015. These chains are backed by strong sourcing network, in–house trend–spotting and design teams, coupled with robust logistics and warehousing network. Further, our distribution network includes 29 Central stores, 39 Brand Factory outlets along with 290 sport stores and exclusive brand outlets.

BUSINESS OUTLOOK

The Management is planning to emerge the Company as a brand company with an extensive distribution network, both offline and online during the financial year 2015–16. Your Company would add new stores, explore new channel of sales for the brand portfolio and increase consumer spending within the stores to increase in growth of revenue and it would be on achieving disproportionate growth of the brands business which would lead to margin expansions.

Your Company would be taking all steps to expand its retail network by expansion of its own format stores as well as capture newer markets which are currently not serviced by multi–brand outlets. The Management would also ensure that the dedicated teams continuously review various brands in light of the trends, moods and aspirations of the customers and appropriately position these brands to ensure the growth. The teams would also be increasing Company's brands portfolio as well as extend existing brands to newer categories to capture larger consumer spending. The Company would undertake various initiatives to increase footfalls, store productivity and consumer ticket size and it will continue to explore opportunities to partner and invest in fast growing labels managed by designers and entrepreneurs.

ISSUE OF EQUITY SHARES

During the year under review, the Company has issued and allotted 3,17,35,800 Equity Shares of the Company as under:

• 2,73,785 Equity Shares were issued and allotted under FLFL Employees' Stock Option Scheme –2013, to the eligible employees of the Company;

• 1,55,27,950 Equity Shares were issued and allotted to PI Opportunities Fund–I, a venture capital fund at a price of Rs. 80.50 per Equity Share (including share premium of Rs. 78.50 per Equity Share) on preferential basis on June 13, 2014;

• 1,59,34,065 Equity Shares were issued and allotted to Ryka Commercial Ventures Private Limited, a promoter group company at a price of Rs. 91 per Equity Share (including share premium of Rs. 89 per Equity Share) on preferential basis on November

17, 2014. Subsequent to the closure of the year under review, the Company has issued and allotted 33,09,436 Equity Shares of the Company as under:

• 32,96,700 Equity Shares of the Company were issued and allotted to Arlette Infrastructure Private Limited (AIPL), a promoter group company, at a price of Rs. 91 per Equity Share (including share premium of Rs. 89 per Equity Share) upon conversion of 32,96,700 Compulsorily Convertible Debentures (CCDs) held by AIPL on April 01, 2015;

• 12,736 Equity Shares were issued and allotted under FLFL Employees' Stock Option Scheme –2013, to the eligible employee of the Company on May 20, 2015.

DIVIDEND

The Board of Directors of the Company has recommended a dividend of Rs. 0.40 (20.00%) per Equity Share of Rs. 2 each for the financial year ended March 31, 2015. The said dividend shall be subject to the approval of the Members at the ensuing Annual General Meeting.

The dividend, if approved by the Members at the Annual General Meeting, would entail a payout of Rs. 9.10 Crore (including Dividend Distribution Tax of Rs. 1.52 Crore) for the financial year 2014–15 as compared to Rs. 7.97 Crore (including Dividend Distribution Tax of Rs. 1.16 Crore) for the financial year 2013–14.

INVESTMENTS

During the year under review, the Company has made strategic investments in the following entities:

Eclat Life Style Private Limited (ECLAT)

The Company has made further investment in ECLAT to increase its total stake from 11.00% to 30.00% of the paid–up equity capital of ECLAT, a company engaged in the business of footwear under brand "Famozi" in India.

Mineral Fashions Private Limited (MFPL)

The Company has made further investment in MFPL to increase its total stake from 22.70% to 37.00% of the paid–up equity capital of MFPL, a company engaged in the business of manufacturing & retailing of clothing & fashion accessories under the brand "Mineral".

Indus Tree Crafts Private Limited (ITCPL)

The Company has made further investment in ITCPL to increase its total stake from 63.34% to 72.16% of the paid–up equity capital of ITCPL, a company engaged in the business of designing, creating, exporting, domestic retailing and distribution of a wide range of environmentally and socially sustainable products under brand "Mother Earth".

Unico Retail Private Limited (URPL)

The Company has acquired 12.00% equity stake in URPL, a company engaged in the business of handbags, belts and wallets under the brand "PEPERONE" in India.

Elisir Lifestyle Private Limited (ELISIR)

The Company has acquired 60.00% equity stake in ELISIR, a company engaged in the business of manufacture, supply and distribution of footwear and accessories under the brand "Spunk" in India.

Rachika Trading Private Limited (RTPL)

The Company has acquired 80.00% equity stake in RTPL, a company engaged in the business of apparels and fashion accessories under the brand "Giovani".

The Company holds all the above investments made during the year, together with investments already held in its books, as held for sale.

DIVESTMENTS

During the year under review, as a part of its strategy to look for opportunity to divest such investments which provide appropriate appreciation and valuation, the Company divested 31.50% equity stake out of 35.00% equity stake held in Celio Future Fashion Private Limited (formerly known as Celio Future Fashion Limited).

DEBENTURES

During the year under review, the Company had issued 32,96,700 Compulsorily Convertible Debentures (CCDs) of face value of Rs. 91 each convertible into 32,96,700 Equity Shares of Rs. 2 each of the Company to Arlette Infrastructure Private Limited (AIPL), a promoter group company on November 17, 2014. The said CCDs have been converted into equity shares of the Company as mentioned herein above.

The Company has also issued 2,000 11.00% Secured Non–Convertible Debentures of face value of Rs. 10 lakh each at par aggregating to Rs. 200 Crore on private placement. PUBLIC DEPOSITS

The Company has not accepted any deposits from the public and as such, no amount on account of principal or interest on deposits from public was outstanding as at March 31, 2015.

CORPORATE GOVERNANCE

A Report on Corporate Governance along with a Certificate from the Statutory Auditors of the Company regarding the compliance with the conditions of Corporate Governance as stipulated under Clause 49 of the Listing Agreement, forms part of the Annual Report.

MANAGEMENT DISCUSSION & ANALYSIS

The Management Discussion and Analysis as required under Clause 49 of the Listing Agreement forms part of the Annual Report.

DISCLOSURE REQUIREMENTS

Details of programmes for familiarization of Independent Directors with the Company are available on the website of the Company at the link http:// futurelifestyle.in/pdf/ID_Familiarization.pdf

Policy for determining material subsidiaries of the Company is available on the website of the Company at the link http://futurelifestyle.in/pdf/Mat_Sub_Policy.pdf

Policy on dealing with related party transactions is available on the website of the Company at the link http://futurelifestyle.in/pdf/RPT_Policy.pdf

The Company has formulated and disseminated a Whistle Blower Policy to provide Vigil Mechanism for employees and Directors of the Company to report genuine concerns that could have serious impact on the operations and performance of the business of the Company. This Policy is in compliance of the provisions of section 177(9) of the Companies Act, 2013 and Clause 49 of the Listing Agreements with the Stock Exchanges in India.

NUMBER OF MEETINGS OF THE BOARD

During the year under review, six meetings of the Board were held, details of which are given in the Corporate Governance Report that forms part of the Annual Report.

SUBSIDIARY, JOINT VENTURE AND ASSOCIATE COMPANIES

Pursuant to provisions of section 129(3) of the Companies Act, 2013, a statement containing salient features of the financial statements of the Company's subsidiaries in Form AOC–1 is attached to the financial statements of the Company, which forms part of the Annual Report.

SUBSIDIARIES

Indus–League Clothing Limited (ILCL)

ILCL is dealing in the readymade apparels and accessories. Your Company holds 100.00% of paid–up capital of ILCL.

Elisir Lifestyle Private Limited (ELPL)

ELPL is engaged in the business of manufacturing, supply and distribution of footwear and accessories in India. Your Company holds 60.00% of paid–up capital of ELPL.

Rachika Trading Private Limited (RTPL)

RTPL is engaged in the business of apparels and fashion accessories. Your Company holds 80.00% of paid–up capital of RTPL.

JOINT VENTURES

Holii Accessories Private Limited (HOLII)

HOLII is engaged in the business of retailing fashion accessories such as leather handbags, wallets and other accessories. Your Company holds 50.00% of paid–up capital of HOLII.

Celio Future Fashion Private Limited (CELIO)

CELIO is engaged in the business of single brand retailing of men's wear. Your Company holds 3.50% of paid–up capital of CELIO. As reported hereinabove, your Company has sold 31.50% shares to Celio International, SA during the year under review.

Clarks Future Footwear Private Limited (CLARKS)

(formerly known as Clarks Future Footwear Limited)

CLARKS is engaged in the business of single brand wholesale and retailing of footwear and accessory and deals in foreign collaboration of various footwear items and accessories such as shoes, boots, sandals, handbags. Your Company holds 50.00% of paid–up capital of CLARKS. ASSOCIATES

Indus Tree Crafts Private Limited (ITCPL)

ITCPL is engaged in the business of designing, creating, exporting, domestic retailing and distribution of a wide range of environmentally and socially sustainable products. Your Company holds 72.16% of paid–up equity capital, which represents 25.79% of total paid–up capital (inclusive of equity and convertible preference capital) of ITCPL.

Indus Tree Producer Transform Private Limited (ITPTPL)

ITPTPL is engaged in the business of designing, retailing, wholesale trading, exporting handicrafts, handloom, personal care and value added food items made by commodities. This includes garment, furniture, personal and home accessories, utility items, textiles, leather, natural fibre, stone wood glass rubber items as well as personal care such as soaps, shampoos, cosmetics and value added food such as staples, cereals, spices, tea, coffee, pickles, papads, juices, ready to eat and ready to prepare items. ITCPL holds 100.00% of paid–up capital of ITPTPL.

Resource World Exim Private Limited (RWEPL)

RWEPL is engaged in the business of indo–fusion women's fashion apparel business under the brand "Desi Belle". Your Company holds 27.50% of paid–up capital of RWEPL.

KFC Shoemaker Private Limited (KSPL)

KSPL focuses on wholesale and retailing of footwear under the brands "Tresmode" & "Solovoga". Your Company holds 33.30% of paid–up capital of KSPL.

ECLAT engaged in business of footwear under brand "Famozi" in India. Your Company holds 30.00% of paid–up capital of ECLAT.

Turtle Limited (TURTLE)

TURTLE focuses on manufacturing and retailing of readymade garments. Your Company holds 26.00% of paid–up capital of TURTLE.

PERFORMANCE EVALUATION OF BOARD

Pursuant to the provisions of the Companies Act, 2013 and Clause 49 of the Listing Agreement, the Board has carried out an annual evaluation of performance of its own, the Committees thereof and the directors individually. At the meeting of the Board all the relevant factors that are material for evaluating the performance of the Committees and of the Board were discussed in detail.

A separate exercise was carried out to evaluate the performance of individual directors including the Chairman of the Board, who were evaluated on parameters such as level of engagement and contribution, independence of judgment, safeguarding the interest of the Company and its minority shareholders, etc. The performance evaluation of the independent directors was carried out by the entire Board except the independent director being evaluated. The performance evaluation of the Chairman and Non–Independent Directors was carried out by the Independent Directors.

The Directors expressed their satisfaction with the evaluation process.

POLICY ON DIRECTORS' APPOINTMENT AND REMUNERATION

The Company's policy on directors' appointment and remuneration and other matters provided in section 178(3) of the Companies Act, 2013, has been disclosed in the Corporate Governance Report, which forms part of the Annual Report.

DIRECTORS AND KEY MANAGERIAL PERSONNEL

During the year under review, Mr. Rahul Mehta ceased to be an Additional Director at the Second Annual General Meeting of the Company held on August 08, 2014. The Board placed on record its appreciation of the valuable contribution made by him during his tenure with the Company.

During the year under review, the Board appointed Ms. Sharda Agarwal as an Additional (Independent) Director of the Company w.e.f. March 27, 2015. As per the provisions of section 161(1) of the Companies Act, 2013 ('the Act'), she holds office upto the date of the ensuing Annual General Meeting. A Notice under section 160(1) of the Act, has been received from a Member signifying its intention to propose Ms. Sharda Agarwal as an Independent Director of the Company. The Board is also of the opinion that Ms. Sharda Agarwal is independent of the management of the Company and recommended her appointment as an Independent Director for a term of five years at the ensuing Annual General Meeting.

In terms of section 152 of the Act, Mr. C. P. Toshniwal is liable to retire by rotation and being eligible, offers himself for re–appointment.

The Company has received necessary declarations from all the Independent Directors under section 149(7) of the Act that they meet the criteria of independence laid down in section 149(6) of the Act and Clause 49 of the Listing Agreement.

Mr. Kuldeep Sharma has resigned as Head–Legal & Company Secretary of the Company w.e.f. January 14, 2015. Subsequently, Mr. Sanjay Kumar Mutha was appointed as Chief Legal & Company Secretary of the Company w.e.f. March 17, 2015.

Additional information on appointment / reappointment of directors as required under Clause 49 of the Listing Agreement, is given in the Notice convening the ensuing Annual General Meeting.

AUDIT COMMITTEE

The Audit Committee of the Company comprises of Mr. Shailesh Haribhakti, Independent Director as Chairman of the Committee and Dr. Darlie Koshy, Independent Director and Mr. C. P. Toshniwal, Executive Director & Chief Financial Officer, as Members of the Committee. There are no instances where the Board did not accept the recommendations of the Audit Committee. The terms of reference, powers and roles of the Committee are disclosed in the Corporate Governance Report, which forms part of the Annual Report.

The Board has delegated responsibility to the Risk Management Committee to monitor and review risk management, assessment and minimization procedures and to develop, implement and monitor the risk management plan and identify, review and mitigate all elements of risks which the Company may be exposed to. The Audit Committee and the Board also periodically review the risk management assessment and minimization procedures.

Key risks and threats to the Company are analyzed in the Management Discussion and Analysis, which forms part of the Annual Report.

CORPORATE SOCIAL RESPONSIBILITY (CSR)

In terms of section 135 and Schedule VII of the Companies Act, 2013 ('the Act'), the Board of Directors of your Company constituted a CSR Committee. The Board, based on the recommendation of the CSR Committee, adopted CSR Policy for the Company in its meeting held on May 20, 2015.

In pursuance of the CSR Policy, the CSR Committee is working towards a road map to identify and take up CSR projects, which are still in the initial stage. It was also intended to merge the CSR funds at Future Group level so that the combined corpus from all the Group entities would help in undertaking better initiatives.

With regard to the year under review, the Company was not required to spend any amount on CSR activities, since the average net profits of the Company made during the two years immediately preceding financial years (since incorporation), as calculated under section 198 of the Act was negative.

The Brief outline of the CSR Policy of the Company is enclosed as part of this Report as Annexure A.

EMPLOYEES STOCK OPTIONS (ESOPs)

During the year under review, the Nomination and Remuneration Committee has granted 4,64,622 Stock Options to the eligible employees under the FLFL Employees Stock Option Scheme–2013 ("ESOS–2013") and cancelled 11,596 Stock Options granted in terms of ESOS–2013.

The applicable disclosures as stipulated under SEBI Guidelines as on March 31, 2015 with regard to the ESOS–2013 are provided in Annexure B to this Report.

Further, the Company also proposes a new FLFL Employees Stock Option Scheme–2015, which is proposed to be implemented through the Employees' Welfare Trust. Necessary resolutions for approval of the Members are being placed at the ensuing Annual General Meeting. PARTICULARS OF EMPLOYEES

In terms of the provisions of section 197(12) of the Companies Act, 2013 ('the Act') read with Rules 5(2) and 5(3) of the Companies (Appointment and Remuneration of Managerial Personnel) Rules, 2014, a statement showing the names and other particulars of the employees drawing remuneration in excess of the limits set out in the said rules are provided in the Annual Report.

Disclosures pertaining to remuneration and other details as required under section 197(12) of the Act read with Rule 5(1) of the Companies (Appointment and Remuneration of Managerial Personnel) Rules, 2014 are provided in the Annual Report.

Having regard to the provisions of the first proviso to section 136(1) of the Act, the Annual Report excluding the aforesaid information is being sent to the Members of the Company. The said information is available for inspection at the Registered Office of the Company during working hours and any Member interested in obtaining such information may write to the Company Secretary and the same will be furnished on request. The full Annual Report including the aforesaid information is being sent electronically to all those Members who have registered their email addresses and is available on the Company's website.

DISCLOSURE UNDER THE SEXUAL HARASSMENT OF WOMEN AT WORKPLACE (PREVENTION, PROHIBITION AND REDRESSAL) ACT, 2013

Your Company has always believed in providing a safe and harassment free workplace for every individual working in the Company through various training, awareness and practices. The Company always endeavors to create and provide an environment that is free from discrimination and harassment including sexual harassment.

Your Directors further state that during the year under review, there were no cases filed pursuant to the Sexual Harassment of Women at Workplace (Prevention, Prohibition and Redressal) Act, 2013.

PARTICULARS OF LOANS, GUARANTEES AND INVESTMENTS

Particulars of loans, guarantees and investments under the provisions of section 186 of the Companies Act, 2013 are provided in the note no. 46 of notes forming part of the financial statements, which forms part of the Annual Report.

DIRECTORS' RESPONSIBILITY STATEMENT

Pursuant to section 134(5) of the Companies Act, 2013, the Board of Directors of the Company confirms that:–

(i) in the preparation of the annual accounts for the financial year ended March 31, 2015, the applicable accounting standards have been followed along with proper explanation relating to material departures;

(ii) the directors have selected such accounting policies and applied them consistently and made judgments and estimates that are reasonable and prudent so as to give a true and fair view of the state of affairs of the Company at the end of the financial year and of the profit of the Company for the year ended March 31, 2015;

(iii) the directors have taken proper and sufficient care for the maintenance of adequate accounting records in accordance with the provisions of the Companies Act, 2013 for safeguarding the assets of the Company and for preventing and detecting fraud and other irregularities;

(iv) the directors have prepared the annual accounts for the financial year ended March 31, 2015 on a going concern basis;

(v) the directors, further state that they have laid down internal financial controls to be followed by the Company and that such internal financial controls are adequate and were operating effectively; and

(vi) the directors have devised proper systems to ensure compliance with the provisions of all applicable laws and that such systems were adequate and operating effectively.

AUDITORS AND AUDITORS' REPORT

Statutory Auditors

M/s. NGS & Co. LLP, Chartered Accountants (Firm Registration No. 119850W) have been appointed as the Statutory Auditors of the Company from the conclusion of the Second Annual General Meeting of the Company held on August 08, 2014 till the conclusion of the Fifth Annual General Meeting of the Company. However, their appointment shall be subject to ratification by the Members in every Annual General Meeting during the said term.

The Company has received a written confirmation from the Auditors that the ratification of their appointment for the next financial year, if made, shall be in accordance with the criteria as provided under section 141 of the Companies Act, 2013.

The Auditors' Report on the financial statements for the financial year ended March 31, 2015 does not contain any qualification, reservation or adverse remark.

Secretarial Auditor

M/s. Sanjay Dholakia & Associates, Practising Company Secretary (Membership No.2655 /Certificate of Practice No.1798) was appointed as Secretarial Auditor to conduct the secretarial audit of the Company for the financial year 2014–15, as required under section 204 of the Companies Act, 2013 and Rules made thereunder.

The Secretarial Audit Report for the financial year 2014–15 is appended as Annexure C which forms part of this Report.

The said Secretarial Auditors' Report does not contain any qualifications, reservations or adverse remarks.

EXTRACT OF ANNUAL RETURN

In accordance with section 134(3)(a) of the Companies Act, 2013, an extract of annual return in the prescribed Form MGT–9 is appended as Annexure D, which forms part of this Report.

CONSOLIDATED FINANCIAL STATEMENTS

The Company had acquired certain investments through vesting of the demerged undertakings under the Composite Scheme of Arrangement and Amalgamation. It had been decided by the Company that all the investments would be held for sale. The investments made thereafter, were also decided to be held for sale. Since all investments made by the Company in Subsidiary companies, Joint Venture companies and Associate companies are held exclusively with a view to its subsequent disposal in near future and therefore it is not required to prepare consolidated financial statements under the provisions of Companies Act, 2013 and the prescribed Accounting Standards.

PARTICULARS OF CONTRACTS OR ARRANGEMENTS WITH RELATED PARTIES

During the year under review, all transactions entered into by the Company with related parties as defined under the Companies Act, 2013 and Clause 49 of the Listing Agreement, were in the ordinary course of business and on an arm's length basis. There were no materially significant transactions with the related parties during the financial year which were in conflict with the interest of the Company. Disclosure of transactions with related parties as required under the Accounting Standard (AS–18) has been made in the notes forming part of the financial statements.

Particulars of contract or arrangements with related parties referred to in section 188(1) of the Companies Act, 2013, in the prescribe Form AOC–2, is appended as Annexure E, which forms part of this Report.

INTERNAL FINANCIAL CONTROL

The details in respect of internal financial control and their adequacy are included in the Management Discussion & Analysis, which forms part of the Annual Report.

The particulars as required under section 134(3) (m) of the Companies Act, 2013 read with Rule 8 of the Companies (Accounts) Rules, 2014, relating to conservation of energy, technology absorption, foreign exchange earnings and outgo, are provided in Annexure F, which forms part of this Report.

AWARDS AND RECOGNITIONS

The Company received awards in categories like

• Central's lingerie category team bagged two awards at Triumph India's Annual Awards Ceremony for Excellence in Business Innovation and for highest LTL growth for the year 2013–14.

• Converse was awarded the 'Best Men's FootwearBrand' at the Myntra Brand Summit 2014 held in September 2014;

ACKNOWLEDGEMENT

The Board thanks all customers, bankers, investors, vendors and other stakeholders for the continued support and patronage during the year under review. The Board places on records its sincere appreciation to the employees of the Company whose efforts, hard work and dedication has enabled the Company to achieve the targets and recognitions.